Basic savings account to be no-frills: RBI tells banks

In a bid increase the penetration of banking services to weaker sections of the economy, RBI has asked banks to convert existing no-frills account into basic saving bank deposit account and provide zero balance facility in these accounts along with ATM-cum-debit cards without any extra charges, HT reports.

In a bid increase the penetration of banking services to weaker sections of the economy, the Reserve Bank of India (RBI) has asked banks to convert existing no-frills account into basic saving bank deposit account and provide zero balance facility in these accounts along with ATM-cum-debit cards without any extra charges.

"With a view to doing away with the stigma associated with the nomenclature 'no-frills' account and making the basic banking facilities available in a more uniform manner across banking system, it has been decided to modify the guidelines on opening of basic banking 'no-frills' accounts," RBI said in a statement.

"This account shall not have the requirement of any minimum balance.... No charge will be levied for non-operation/activation of in-operative 'Basic Savings Bank Deposit Account'," the RBI said.

Basic savings bank deposit account holders will be allowed only a maximum of four withdrawals in a month, including through ATMs.